Eurotunnel pressed to make peace with TML

SHAREHOLDERS and bankers are turning the screw on Eurotunnel in a move to get the company back to the negotiating table with TML, the group of contractors building the Channel tunnel.

In France, a group of private investors are preparing to challenge the Eurotunnel board at the annual meeting on 24 June. The group, frustrated at the warring between Eurotunnel and TML, want to get a place on Eurotunnel's board with the hope of forcing a rapprochement with the contractors.

Some of Eurotunnel's 18 lead banks are also said to have lost patience over the dispute, and are believed to be behind secret meetings between the chief executives of Eurotunnel and TML, Sir Alastair Morton and Neville Simms. Officially there has been no 'formal or informal' contact between them, but the Independent on Sunday has learnt that they have met more than once to discuss differences.

Talks between the two companies collapsed in March in a row over changes in design and contract arrangements for fixed equipment. TML has claimed pounds 1.4bn.

Eurotunnel offered pounds 1.2bn in a mixture of cash and shares, an offer now withdrawn. The dispute went to arbitration, and TML was told to specify each item of its claim against Eurotunnel.

The dispute is behind the delay in the tunnel's opening, which has been put back from May this year to next spring. Harsh words have been spoken on both sides.

Mr Simms, chief executive of Tarmac, took over at TML early last month, saying that the two sides had to move forward arm-in-arm. Sir Alastair seems to have responded to the conciliatory tone, though both men know the banks are breathing down their necks. Credit Lyonnais is understood to be particularly worried.

The contractors, which include Tarmac, Wimpey, BICC and Costain, were due to meet this weekend, though a spokesman said it was a routine meeting arranged some time ago. He refused to say whether the dispute over costs was on the agenda.

Sir Alastair is likely to get a rough ride at Eurotunnel's annual meeting from the group of French private investors, the Eurotunnel Association for Action, which claims 1,300 members. Its leader, Christian Cambier, is trying to get proxy votes worth 5 per cent. He already has 668 proxies, though it is unclear what percentage this speaks for.